There were 830,000 completed foreclosures nationwide in 2011, compared with 1.1 million foreclosures in the previous year, CoreLogic, a provider of consumer, financial and property information, disclosed early this month. This may be a sign that more lenders and mortgage servicers have been willing to employ strategies to help distressed homeowners, according to real estate industry officials.
CoreLogic reports since the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures. New data shows nationally, 1.4 million homes or 3.4 percent of all homes with a mortgage were in the foreclosure inventory as of December 2011. A property is placed in the foreclosure inventory when the mortgage servicer places the property into the foreclosure process after a serious delinquency is reached and remains there until foreclosure is completed.
The number of loans in the foreclosure inventory nationwide decreased 8.4 percent or by 130,000 properties in December 2011 compare to December 2010. The share of borrowers nationally that were 90 days or more delinquent on their mortgage payments, classified as seriously delinquent, improved slightly to 7.3 percent in December 2011, compared with 7.8 percent in December 2010.
"The inventory of foreclosed properties has begun to shrink, and the pace at which properties are entering foreclosure is slowing. While foreclosure filings are being curtailed by a variety of judicial and regulatory constraints, mortgage servicers are completing REO sales faster than they are completing foreclosures," said Mark Fleming, chief economist with CoreLogic. "This is the first time in a year that REO sales have outpaced completed foreclosures."
The five states with the highest foreclosure inventory were: Florida (11.9 percent), New Jersey (6.4 percent), Illinois (5.4 percent), Nevada (5.3 percent) and New York (4.6 percent).
The report follows a recent release by San Diego based real estate information service DataQuick which disclosed that foreclosure activity decreased in California in the fourth quarter of 2011 to the second-lowest level in more than four years. A total of 61,517 Notices of Default were recorded in the fourth quarter of 2011, down 11.9 percent from 69,799 in fourth-quarter 2010. California foreclosures totaled 31,260 during the fourth quarter, down 11.8 percent from 35,431 for fourth-quarter 2010.
Foreclosures as a total share of all California sales dropped, as well. According to DataQuick, foreclosure resales accounted for 33.7 percent of all California resale activity last quarter, down from 37.5 percent the same time the previous year. Short sales made up an estimated 19.8 percent of statewide resale activity last quarter, up slightly from 17.9 percent the previous year.
"It's good to know that the foreclosure numbers are down. Lenders appear to be employing more flexible strategies and working with homeowners on short sales, refinances, principal reduction and other forms of loan modification," said Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
But more needs to be done, according to Yost. "Issues such as foreclosures and access to affordable financing don't just affect people who own a home – homeownership shapes communities and strengthens the nation's economy. More needs to be done to reduce the inventory of foreclosed homes and address the lack of available and affordable mortgage financing," Yost said.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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